This article was published on the ChosunBiz MoneyMove (MM) site at 3:48 p.m. on Apr. 8, 2026.
Hotel Lotte is set to raise funds in the hundreds of billions of won to acquire the site of the Lotte New York Palace hotel. The company had initially planned to use proceeds from the sale of Lotte Rental, but with the deal delayed and the won-dollar exchange rate surging, it revised the financing structure to increase the share of external borrowing.
According to the investment banking (IB) industry on the 8th, Hotel Lotte is pushing to raise about $300 million (about 450 billion won) in external funding to finance the acquisition of the New York Palace hotel site. The company has been in talks with major domestic financial institutions and investors since late last year and recently finalized the size of the fundraising and completed a board resolution, according to reports. Meritz Securities is confirmed to be reviewing the related deal. However, as it is still in the early stages, the specific structure and terms have not been finalized.
The fundraising is tied to Lotte Group's plan to sell non-core assets. Hotel Lotte had planned to use part of the proceeds from selling Lotte Rental to cover a portion of the site acquisition funds. But with the sale process delayed, the funding timetable was disrupted, and the company pivoted to increase the external borrowing ratio to more than half.
Hotel Lotte is also injecting internal funds. The board recently decided to invest a total of $250 million in a paid-in capital increase for its U.S. subsidiary, Lotte Hotel Holdings USA. The funds are to be used for New York Palace hotel land purchase costs and as recurring investment resources. Adding $300 million in external funding, the company plans to raise a total of $550 million.
Hotel Lotte has also been tapping the capital markets recently. After securing liquidity by issuing hybrid securities and commercial paper (CP) in succession, the company is now concurrently arranging debt financing to raise funds for overseas real estate investment.
Lotte New York Palace is a flagship New York luxury hotel that Hotel Lotte acquired in 2015 for about $805 million. At the time, the company purchased only the building and leased the land long-term from the Archdiocese of New York, but with land prices rising, there were concerns that rent could jump significantly in the future.
In response, Hotel Lotte revised its strategy to directly acquire the land to enhance expense stability and asset value. Late last year, it agreed to purchase the site for about $490 million and has since reviewed various funding options, including asset securitization and external borrowing.
The market expects that, as an asset in a prime New York location, strong interest from overseas investors will enable funding on relatively favorable terms. However, the increased reliance on external financing, after parts of the internal funding plan fell through, is seen as a burden.